Deep in the red, Canada Post denies it will cut delivery days

OTTAWA -- The mail will continue to be delivered in Canada five days a week, despite a media report that suggests otherwise, Canada Post says.

The Crown corporation is looking at ways to save money as the mail delivery business continues to dwindle, but it's denying it was considering cutting delivery schedules to four -- even three -- days a week.

"Canada Post is always looking for ways to improve efficiencies in operations while reducing costs," the agency said in an statement.

"To address our challenges Canada Post has launched several initiatives... but no other major changes to operations are being made at this time."

The post office has been grappling with continuing operating shortfalls, having reported a $327-million loss in 2011. It's been losing money ever since.

In November, the Canada Post Group of Companies reported a pre-tax loss of $75 million in the third quarter of 2012, its sixth consecutive quarterly loss.

The agency blamed an accelerating decline in mail volume, the result of what it called "a historic shift from paper-based to digital communications" by Canadian consumers.

While Canadians have been sending fewer letters through the mail, an increase in the number of packages being ordered online has pushed parcel deliveries higher by seven per cent.

Without profits from parcel services, Canada Post would have lost $114 million in the first three quarters of last year. Instead, that loss was reduced to $88 million.

The Canada Post Group of Companies includes Canada Post Corp. and its subsidiaries, Purolator Inc., SCI Group Inc. and Innovapost Inc.

The agency has been speaking on a weekly basis with the Canadian Union of Postal Workers in an effort to find ways to reduce costs. But so far, those talks have met with limited success.

"We've discussed the (possible) closure of postal outlets, we've discussed about... consolidation of work and what they call the 'postal transformation,' " said CUPW president Denis Lemelin.

"But we are still fighting them on that."

Canada Post closed nearly 20 smaller outlets last year and is planning further cuts this year, but the union opposes the closures.

Canada Post and CUPW reached a collective agreement late last year after the union launched a series of rotating strikes in 2011, which the corporation countered by locking out its workforce.

The labour disruption was ended when the Harper government introduced back-to-work legislation.

One of Canada Post's biggest financial problems is a solvency deficit in its employee pension plan. That deficit reached $4.7 billion by the end of 2011. The agency is, by law, responsible for funding shortfalls in the plan.

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